Most resources are scarce (including our time.) Markets are the most efficient way to allocate resources. Markets allow for exchange, but equally importantly, they allow for *pricing* of scarce resources. Pricing requires a neutral unit of account. Fiat broke this. /1

2/ when goods and services are priced in fiat, we get "perverse" effects and rent seeking. Currently some large companies can effectively borrow USD for free (ex: Fed buying corporate bonds), while many smaller businesses are crowded out of lending markets. This causes large

3/ companies to rationally act as speculators, including by buying up assets and small companies. They don't ask, "is this the best use of capital", but rather, "we have this free capital, what can we do with it to earn a return with the Fed/Gov taking the risk?"

4/ this is analogous to the housing bubble when a middle income person might rationally have taken out mortgages to own 4 homes. Heads they win, tails the bank/investors lose.

5/ one angle to think about this is via the market for money: interest rates. Supply and demand for money is rationally determined by opportunity cost and credit risk. Today though, everyone is effectively a spread trader or arbitrager to central bank loans.

6/ it's like the difference between valuing a company on the basis of the cash flows you'll receive from owning it, versus valuing it on a relative basis against Peloton...if the stock price of Peloton was being set by bureaucrats.